FOREX-Euro swings wildly after ECB'S Draghi disappoints

* Euro rises to two-month high versus dollar
* Bond-buying plan still lacks details

NEW YORK, Sept 6 (Reuters) - The euro was higher against the
dollar but off a two-month high touched earlier on Thursday
after European Central Bank President Mario Draghi gave
investors few new clues on the bank's plans to stem the debt
crisis than became known to investors from a leak to the press
on Wednesday.
Speaking at a press conference after the ECB left interest
rates unchanged, Draghi said the bank agreed to launch a new and
potentially unlimited bond-buying program to lower struggling
euro zone countries' borrowing costs and draw a line under the
debt crisis.
Seeking to back up his July pledge to do whatever it takes
to preserve the euro, Draghi said the new plan, aimed at the
secondary market, would address bond market distortions and
"unfounded" fears of investors about the survival of the euro.
The euro zone economy will probably contract more than
previously expected this year, according to new European Central
Bank staff forecasts, which also raised the bank's outlook for
inflation for 2012/2013..
"Draghi's over and we are digesting what he had to say,"
said Omer Esiner, chief market analyst at Commonwealth Foreign
Exchange in Washington. "For the most part it was positive for
the euro but still short on some details."
The euro was last at $1.2615, up 0.1 percent, with the
session low at $1.2559.
The single currency had climbed to $1.2650, its
highest since early July after the ECB kept interest rates on
hold, leaving its main rate unchanged at 0.75 percent. Some in
the market had been bracing for an interest rate cut by the ECB
to support flagging growth in the euro zone.
The European Central Bank will also offer banks easier
access to central bank loans by loosening its collateral
standards for debt from countries getting bailouts or bond
market support, ECB President Mario Draghi said on Thursday.
.
The euro rallied on Wednesday after a string of leaks from
euro zone officials made markets more confident that the ECB
President Mario Draghi will back up his pledge to do "whatever
it takes" to save the euro.
Two central bank sources told Reuters on Wednesday Draghi
would give no details of planned amounts or explicit targets for
spreads or interest rates.
Most market players predicted limited gains for the euro
even if the ECB gave more details than expected. The single
currency has risen from a two-year low struck in late July on
speculation Draghi will unveil a new bond-buying program to curb
high Spanish and Italian borrowing costs.
A German Constitutional Court ruling on the euro zone
bailout fund is scheduled for Sept. 12, meaning many investors
would be wary of initiating large positions before then.
Germany's Economy Minister Philipp Roesler said on Thursday
the European Central Bank's purchases of sovereign debt were not
a permanent solution to the region's problems and stressed that
structural reforms needed to have priority.

SWISS FRANC FALLS
Earlier, the euro touched a 3-1/2-month high against the
Swiss franc on the first anniversary of the Swiss
National Bank's decision to impose a floor on that pair and curb
the Swiss currency's gains.
The franc has fallen sharply against the euro in the past
two sessions on market talk that the SNB has been buying euros
to protect the 1.20 francs floor. The SNB has declined to
comment.
The dollar was last up 0.7 percent at 78.93 yen, with
a session peak of 79.02 yen, after solid U.S. private payrolls
and services reports.
U.S. private employers added 201,000 jobs in August, easily
beating economists' expectations, a report by a payrolls
processor showed on Thursday.
The report comes a day before the closely watched U.S.
non-farm payrolls in August.
The dollar broke above 79 yen to a two-week high after a
report showed the pace of growth in the massive U.S. services
sector rose in August on the back of a rebound in employment and
exports.
Sterling was up 0.1 percent at $1.5923, near a 3-1/2
month high, after the Bank of England kept interest rates steady
and its quantitative easing program unchanged, as expected.